US stocks gained and the dollar softened heading into the Thanksgiving Day holiday - Newsquawk Asia-Pac Market Open

• US stocks gained as risk-on trade was evident heading into Thanksgiving with outperformance in the Russell and the Nasdaq, alongside broad-based gains. Tech was one of the clear outperformers, but Communications lagged with AI names trading higher after recent pressure, although Alphabet (GOOGL) gave up some of its recent rally, weighing on the comms sector. The latest US data was mixed with low initial jobless claims easing labour market concerns, and durable goods beat expectations, although Chicago PMI saw a notable slump.
• USD was weaker heading into the US Thanksgiving holiday, where newsflow and volatility will likely be thinner, which also applies to Friday. Nonetheless, headline drivers out of the US were driven by data in which Initial Jobless claims fell to 216k from 220k, and beneath the expected 225k, which saw DXY rise to initial intra-day highs and Durable Goods also beat, although Chicago PMI disappointed. Meanwhile, the Fed Beige Book noted economic activity was little changed since the previous report, according to most of the twelve Federal Reserve Districts, though two Districts noted a modest decline and one reported modest growth.
• Looking ahead, highlights include New Zealand ANZ Business Confidence, Australian Private Capital Expenditure, Chinese Industrial Profits, BoK Rate Decision, Comments from BoJ's Noguchi, Supply from Australia, US Markets are Closed on Thursday for Thanksgiving Day.

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LOOKING AHEAD

• Highlights include New Zealand ANZ Business Confidence, Australian Private Capital Expenditure, Chinese Industrial Profits, BoK Rate Decision, Comments from BoJ's Noguchi, Supply from Australia, US Markets are Closed on Thursday for Thanksgiving Day.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks gained as risk-on trade was evident heading into Thanksgiving with outperformance in the Russell and the Nasdaq, alongside broad-based gains. Tech was one of the clear outperformers, but Communications lagged with AI names trading higher after recent pressure, although Alphabet (GOOGL) gave up some of its recent rally, weighing on the comms sector. The latest US data was mixed with low initial jobless claims easing labour market concerns, and durable goods beat expectations, although Chicago PMI saw a notable slump.
• SPX +0.65% at 6,810, NDX +0.87% at 25,237, DJI +0.67% at 47,427, RUT +0.91% at 2,489.
• Click here for a detailed summary.

TARIFFS/TRADE

• USTR continues exclusions from China section 301 tariffs related to forced technology transfer investigation until November 10, 2026.
• US Pentagon reportedly said that Alibaba (BABA) should be on the list for China military ties, according to Bloomberg.
• US and Taiwan target a trade and investment deal which includes training for the American workforce, according to Reuters citing sources.
• China’s MOFCOM said China’s Commerce Minister had a call with the EU Trade Commissioner, while it added that the global chips supply chain still faces uncertainties and hopes the EU will urge the Dutch government to come up with constructive solutions.
• Chinese regulators blocked ByteDance from using NVIDIA (NVDA) chips in new data centres, with the move part of Beijing’s strategy to force adoption of domestic chips, according to The Information.
• Canadian PM Carney said Canada will reduce the quota for steel imports from non-free trade agreement partners to 20% from 50% of 2024 levels and will impose a global 25% tariff on targeted imported steel derivative products. Carney added that the temporary remission on Canadian tariffs on imports will end on 31st January 2026 for steel used in Canada for manufacturing, food packaging and agricultural production, while Canada will work with railway companies to cut freight rates for transporting Canadian steel and lumber interprovincially by 50% from early 2026.

NOTABLE HEADLINES

• Fed Beige Book stated that economic activity was little changed since the previous report, according to most of the twelve Federal Reserve Districts, though two Districts noted a modest decline and one reported modest growth. It also noted that overall consumer spending declined further, although higher-end retail spending remained resilient, while employment declined slightly over the current period with around half of the Districts noting weaker labour demand.

DATA RECAP

• US Initial Jobless Claims (w/e 22nd Nov) 216k vs. Exp. 225.0k (Prev. 220.0k)
• US Continued Jobless Claims (w/e 15th Nov) 1.96M vs. Exp. 1.969M (Prev. 1.974M)
• US Durable Goods (Sep) 0.5% vs. Exp. 0.3% (Prev. 2.9%)
• US Chicago PMI (Nov) 36.3 (exp. 44.3)

FX

• USD was weaker heading into the US Thanksgiving holiday, where newsflow and volatility will likely be thinner, which also applies to Friday. Nonetheless, headline drivers out of the US were driven by data in which Initial Jobless claims fell to 216k from 220k, and beneath the expected 225k, which saw DXY rise to initial intra-day highs and Durable Goods also beat, although Chicago PMI disappointed. Meanwhile, the Fed Beige Book noted economic activity was little changed since the previous report, according to most of the twelve Federal Reserve Districts, though two Districts noted a modest decline and one reported modest growth.
• EUR edged higher but with upside in the single currency capped by resistance at the 1.1600 level. There were several comments from ECB officials, including De Guindos who said the present level of rates is the correct one, while Vujcic said he currently sees no reason for a further interest rate cut.
• GBP ultimately gained, but with price action choppy following an unprecedented UK Budget announcement in which the OBR front-ran the Chancellor. Nonetheless, investors took comfort in the higher headroom (GBP 21.7bln in 2029-30 vs GBP 9.9bln in March), although UK journalists suggested scepticism over how credible Chancellor Reeves' package is. Overall, the OBR forecasts did nothing to knock the narrative that the BoE is likely to cut in December, and if anything, the growth downgrades and tax rises are seen to favour a cut.
• JPY lagged amid the broader risk appetite and despite a recent hawkish-leaning BoJ source report.

FIXED INCOME

• T-notes settled relatively flat, although the curve ultimately steepened after better-than-expected Jobless Claims and Durable Goods, although Chicago PMI missed, while the latest 7yr auction stateside was an overall soft auction, but an improvement from October's offering.

COMMODITIES

• Oil prices crude complex was firmer but with gains capped as attention continued to centre around Russia/Ukraine peace talk negotiations, albeit with updates on the lighter side throughout the day, while the latest EIA inventory report showed a larger-than-expected build in headline crude stocks.
• US EIA Weekly Crude Stocks w/e 2.774M vs. Exp. 0.055M (Prev. -3.426M).
• Baker Hughes Rig Count: Oil -12 at 407, Natgas +3 at 130, Total -10 at 544.

GEOPOLITICAL

MIDDLE EAST

• Hamas said their delegation's visit to Cairo confirms their seriousness and that Israel is hindering the second phase, according to Al Arabiya.

RUSSIA-UKRAINE

• Russia's Deputy Foreign Minister Ryabkov said there are no concessions from Russia on key issues on Ukraine settlement.
• Russian Kremlin spokesperson Peskov urged not to make premature conclusions about the conflict in Ukraine nearing its end. It was also reported that Kremlin aide Ushakov said Russia received the 'latest versions' of the US peace plan on Ukraine.
• EU's Kallas said they see zero indication that Russia is ready for a ceasefire and the notion that Ukraine is losing is false. Kallas added that further sanctions against Russia are necessary, as well as more support to Ukraine.
• German Defence Minister said Ukraine must not be forced to unilaterally cede territory and Germany must redefine its role because we cannot know what alliances we can rely on in the future.

OTHER

• China's embassy in Japan reminded citizens to avoid visiting Japan in the near future.

GLOBAL NEWS

• US President Trump said the US will stop all payments and subsidies to South Africa and that South Africa will not be receiving an invitation to the 2026 G20. Trump added that he did not attend the G20 in South Africa because the government refuses to acknowledge or address human rights abuses endured by Afrikaners, and other descendants of Dutch, French and German settlers.

ASIA-PAC

NOTABLE HEADLINES

• Japan is to fund the supplementary budget with USD 74bln of new debt, while it was separately reported that Japan is to issue more than JPY 11tln in additional government bonds for FY25 extra budget, according to TV Asahi.
• RBNZ Governor Hawkesby said he thinks they are in a position where they can put out an OCR projection which is broadly unchanged, and in a position where they can sort of watch and wait to see how things progress over the course of the next year. Hawkesby added that a number of labour market indicators are beginning to pick up.
• RBNZ Chief Economist Conway said spare capacity has sort of been at its maximum and the output gap is closing.
• New Zealand Finance Minister announced that Rodger Finlay has been appointed Chair of the RBNZ.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Reeves announced in the Budget that she will not raise VAT, income tax, or NICs, while they will be reforming gambling taxes and will raise GBP 1bln per year by 2031, but with no change to in-person levies, and alcohol duties will be raised in line with inflation. Reeves said she will extend the freeze on income tax thresholds by a further 3 years from 2028, while capital gains tax receipts are forecast to rise to GBP 30bln in 2030 (vs GBP 14bln now) and the capital gains tax relief for sale of businesses to employee ownership trusts will fall to 50% from 100%. Furthermore, she announced to extend the freeze on fuel duties until September 2026 and claimed that GBP 150 will be cut from the average household energy bill from April.
• UK DMO Remit for FY25/26 (GBP): Gilt Sales 303.7bln (exp. 308.1bln, prev. 299.2bln).
• UK OBR said the current Budget headroom is GBP 21.7bln in 2029-30 (prev. 9.9bln in March), while it noted that the Budget extends freezes of personal tax thresholds for a further three years from 2028-29 to 2030-31. Furthermore, it forecast 2025 GDP growth at 1.5% (prev. 1.0% in March), 2026 GDP Growth at 1.4% (prev. 1.9% in March) and 2027 GDP growth at 1.5% (prev. 1.8%).
• ECB's Lane said for the sustainability of inflation at 2%, they need to see deceleration of non-energy price growth.
• ECB's de Guindos said the present level of rates is the correct one, while services and wage inflation are progressing positively, but does not see any de-anchoring of price expectations. Furthermore, he stated that the risk inflation will undershoot is limited and he is comfortable with the path for inflation in the next months.
• ECB's Vujcic said he currently sees no reason for a further interest rate cut, although the situation could change if an AI bubble were to burst, according to Borsen Zeitung. Vujcic separately commented that it's more difficult to forecast food inflation due to climate change, and added that there's a risk of surprises, while Vujcic said that for another interest rate cut, they would have to see the inflation path going down.